Euronav: Crude Tanker Market Well Positioned for Multi-Year Upcycle


Euronav NV reported its final financial results for the full year to 31 December 2022.

The large crude tanker market is well positioned to start a multi-year upcycle based on strong fundamentals and well supported tanker market specific catalysts:

• Orderbooks at +25 years lows

• Contracting of newbuilding constrained by high vessel prices, incoming regulations and Shipbuilding capacity limited until 2025/26 by LNG carrier/container contracts

• Global fleet age average of large tanker segments is the highest seen in the last 20 years.

This sector positioning has been augmented by catalysts such as Russian crude/product dislocation. The EU will continue to replace these lost Russian barrels via the Middle East and Atlantic sourcing benefitting the Suezmax and the VLCC-segment. These displacements are expected to translate into structurally longer ton miles. Other data points continue to support a positive tanker market narrative. US crude exports recently hit a new record high of 5.1m bpd reflecting additional SPR (Strategic Petroleum Reserves) cargoes but also underlying strong US production growth. Incoming regulations have been overlooked in the current geopolitical environment but will begin with the application of the CII (Carbon Intensity Indicator) as part of the EEXI (Energy Efficiency eXisting ship Index) family of maritime regulations starting 1 January 2023. Euronav believes that over time the CII will act as a speed limit on maritime transportation pressurizing further tanker capacity.

Asset prices continue to rise for newbuildings and second-hand tankers (5 and 10 year old VLCC & Suezmax values are up 20% in the last six months according to Clarksons) providing owners with optionality. Given the positive set up for the market, it is not surprising that only 3x VLCC and 7x Suezmax exited the fleet (recycled) during calendar 2022 (source: Clarksons).

Time charter market opportunities continue to grow. The global crude tanker market positioning remains very favorable and so far without the support of any positive drivers from China. Crude consumption from China for 2022 year to-date remains below the run rate of 2019 (source: Bloomberg). Recent product export and import quota releases (three months earlier than usual) would suggest China could be returning to previous levels of crude demand. This would be in addition to the supportive factors listed above.

Recent corporate events have not affected the operational performance of the Company as we remain focused and committed to maintain our position of market leadership and have managed to rejuvenate the fleet at a critical time in the market cycle both in buying and ordering modern vessels at good prices as well as be patient and dispose of older assets when the value became interesting.


May 2022 saw Euronav unveil its strategic objective to make the company net zero in terms of CO2 emissions by 2050. Our delivery on this objective has numerous milestones including reducing CO2 intensity and emissions by 40% by 2030 – in line with the Poseidon Principles which the majority of our bank financing is in compliance with. In November 2022, Euronav agreed a new USD 377 million sustainability-linked loan facility, which brings Euronav’s funding with an integrated sustainability component to 52 % of the Company’s total financing. The facility has been concluded with several commercial banks and has a duration of 5 years. This is the fourth sustainability linked financing Euronav has undertaken in the last 2 years. The credit facility incorporates a number of KPI’s which, if met, will reduce Euronav’s interest rate cost by 10 basis points. In December 2022, for the third year running Euronav has been awarded a “B” rating by CDP for our positive awareness and actions on climate change. CDP is a non-profit organisation and a highly regarded form of accreditation on climate action. Each year the stipulations and hurdle requirements become more onerous meaning Euronav’s position has improved year on year.


Euronav entered into an agreement with Daehan Shipbuilding Co. Ltd. for two Suezmax newbuilding contracts during the year. The vessels will be sister ships to our Cedar (2022 -157,310 dwt) and Cypress (2022 – 157,310 dwt), built at the same yard. Both vessels are scheduled for delivery in the third quarter of 2024.

Euronav deliberately accelerated fleet renewal during 2022 given prevailing elevated asset prices for older tonnage. Recycling such capital into newer, younger tonnage provides a more competitive platform for all stakeholders and a far lower environmental footprint. Below is a summary of our disposal activity during 2022.


3 N-class – VLCC USD 13.5 million

4 S-class – VLCC USD 1.8 million

Cap Leon – Suezmax USD 10.8 million

Cap Pierre – Suezmax USD 7.5 million

Cap Philippe – Suezmax USD 12.9 million

Cap Guillaume – Suezmax USD 14.6 million

Europe – ULCC USD 34.7 million

TOTAL USD 95.8 million

Euronav took delivery of the two new vessels in early 2023. VLCC Cassius (2023 – 299,158 dwt) on 11 January 2023 and Camus (2023- 299.158) on 28 February 2023.


The pace of asset price growth for crude tankers was remarkable during 2022 especially for older tonnage. According to data from Clarksons, new build/5/10/15 year old tonnage for VLCC rose 7%/43%/65% and 81% respectively. Suezmax values rose even more for each category 4%/44%/70% and 90% respectively.


The Supervisory Board will propose to the Annual Shareholders’ Meeting of 17 May 2023 to distribute a full year gross return in the amount of USD 1.10 per share to all shareholders. This payout will be a combination of a dividend and a repayment from the share issue premium. This distribution approach will be optimal for shareholders as Euronav anticipates that the share issuance payment part of the distribution will represent at least 90% of the distribution and that part will be at zero withholding tax (WHT).

This proposal adds up to the shareholders distribution already paid for Q1, Q2 and Q3 2022 of USD 0.03 each for a total of USD 0.09 out of the available issue premium, next to the interim dividend paid for Q4 2022 of USD 0.03.

This proposal would bring the total return to shareholders to USD 1.22 for the full year 2022. This demonstrates the strong performance of the Company and its robust balance sheet, supported by the strong outlook in the quarters to come.

Source: Euronav


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